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Friday, March 14, 2008

Economic Justice and Democracy by Robin Hahnel, a book review that was published in the Alameda County Green Party News, Oct., 2007

Economic Justice and Democracy, From Competition to Cooperation by Robin Hahnel

a book review by Ben Leet

Income --- the top one percent of U.S. households earns more each year than 50% of U.S. households. Restated, this says the incomes of 1.1 million American homes exceeds the incomes of 44 million homes. (Source, State of Working America, 2006/2007, Economic Policy Institute, p. 79) Wealth --- the top one percent exceeds the wealth of 91% of U.S. households. (See Consumer Finance Survey, Currents and Undercurrents, page 11, 2006, Federal Reserve Board). Restated, the net assets of 1.1 million American households exceed the net assets of 99 million households. And even though there is great wealth, the book Hardship in America states that 29% of households with children under 12 are unable to meet their basic family budgets. In light of such astounding facts economic justice becomes a paramount problem. Neither of our major political parties is willing to face the issue, in fact they have sold themselves to the highest bidder, and our tax laws reflect this. Once the top marginal tax bracket was 90% between 1943 and 1962, and then it dropped to 70% for another twenty years. Today, according to Citizens for Tax Justice, the overall tax rate (not just the income tax rate) is 19.7% for the poorest 20% of households, whose annual average cash income is $10,400. The overall tax rate for the top 1%, whose average income is $978,000, is 32.8%. This passes for tax progressivity. Even Warren Buffet, a very wealthy businessman, complains that his tax rate is lower than that of his secretary and entire staff. The Green Party has provided a manuscript for reforming our U.S. economy, the Green Party Platform of 2004. (See www.gp.org) For beginners, it states in the section on Livable Income that “We call for a universal basic income (sometimes called a guaranteed income, negative income tax, citizen’s income, or citizen dividend). This would go to every adult regardless of health, employment, or marital status, . . . The amount should be sufficient so that anyone who is unemployed can afford basic food and shelter.” In the section Small Business and Self-Employed the platform states, “Greens support a program that counteracts concentration and abuse of economic power. We support many different initiatives for forming successful, small enterprises that together can become an engine of (and sustainable model for) job creation, prosperity and progress.” The Green Party Platform is a meaningful document describing necessary changes to preserve the hope of American democracy. Robin Hahnel, author of Economic Justice and Democracy, published in 2005 by Routledge Press, is Professor of Economics at American University. “He has been active in many social movements and organizations over the past forty years, most recently with the Southern Maryland Greens and Green Party USA,” to quote the back cover of the book. Hahnel’s book is about the hope of participatory economics. He states that “economic visionaries had failed to provide a coherent model explaining precisely how their alternative to capitalism could work.” His model provides an alternative to the “market system” we are familiar with. This is a visionary model, a visionary book. Central to his economic model is a reliance on social intelligence that replaces financial power in the allocation of resources and distribution of goods. He envisions worker councils, consumer councils, an efficient yet liberal planning process, a plan for environmental protection in the short and long terms, and a plan for integrating such an economy with the international economy. Asking “What Do We Want?” he responds, “Do we want economic decisions to be determined by competition between groups pitted against one another for their well-being and survival. Or do we want workers and consumers to be able to plan their joint endeavors democratically, efficiently, and equitably? In other words, do we want to abdicate economic decision-making to the marketplace or do we want to embrace the possibility of participatory planning?” I think this is a question that resonates for today and many tomorrows. Over the past 20 years the average wages for a white male have dropped by 5%, median household income is up only about 15% over the past 35 years and that is due to women working more hours three months more per year. We are entering into a future where U.S. workers will bid their skills and labor against workers in Mexico who earn 12% of the U.S. standard, those in maquiladoras earn 6%, and those in China and India earn 3%. The economic future is not a bed of roses for those in the most wealthy nation. Certainly the distribution of rewards as I recounted in the first paragraph has not been fair. Readers of the Alameda County Green Party News are directed to the Platform of the Green Party, the Web sites mentioned, and to Hahnel’s book if they have intense interest. While the Green Party focuses on present conditions, and practical and achievable steps to immediately repair the damage of the last 30 years of economic malpractice that enriched the few and impoverished the many, it’s useful to also look far into the future to a society where cooperation prevails over competition, and the creative destruction of advancing technology is managed intelligently and humanely, and the concerns for the environment are accounted for before the damage is done. I wish to offer to Alameda County Green News readers a list of Web sites and organizations that are marvelous references on the topic of economic justice and democratic reform: United for a Fair Economy (ufe.org), the Center for Popular Economics (PopularEconomics.org), the Economic Policy Institute (epi.org and sharedprosperity.org), Raise the Floor (raisethefloor.org), Too Much (toomuch.org), Citizens for Tax Justice (ctj.org), Grassroots Economic Organizations (geo.org), Leading Progressive Organizations (startguide.org), Demos (www.demos.org), and www.inequality.org. But, of course, the Green Party Platform, 2004, also describes remedies for the U.S. economy, at www.gp.org.

2 comments:

I haven't (yet) read Hanel's book, but it's clear from this review that it proposes using the democratic political process to manage in a more just way the capitalist economy. Why not use the democratic political process to apply the democratic principle directly to capitalism? I've developed a model for such an economy. (It can be seen at institutejustice.com.) Such an economy would still have private property and would not have any limit on income. Also, all decisions regarding the production and selling of consumer goods and services would be in private hands. Yet the economy would have justice, stability, and at least a chance for environmental sustainability, with no involuntary unemployment or poverty, and no taxes. All of those benefits (and more) would follow from the institutional structure of the economy, not actions by any government.